How I Trade Swing Positions Around Macro News

Video Transcript

Macro news can create some of the biggest and most unpredictable moves in the market. But as a swing trader, you don’t need to avoid every high-impact news event. What matters is knowing which news is truly dangerous, when to step out of a trade, and most importantly, how to get back in afterwards without chasing the market. So let me show you the rules that I use for trading around macro news.

Now let’s talk about macro news and the trading rules around macro news because macro news, that’s a big part of trading, right? Almost every day, there’s big macro news. So how do we go about this? If there is standard red news—and by red news, I mean high-impact news. If you go to Forex Factory, then it will be marked in red, right? Those are the red news, or in other words, high-impact news.

If there is this red news, I just trade through it, right? I trade through all high-impact news. But to every rule, there is an exception. And the exception is what I call monster news. Monster news is news directly affecting the rates of the currencies. So it is the FOMC, rate decision news, or minimum bid rate. The reason is that these can create massive and unpredictable moves.

And if you take a look here at this screenshot, then the monster news here is the Official Cash Rate on the New Zealand dollar. So I would trade through all of those red news events, but not through the Official Cash Rate. I mean, you need to have a position that has the New Zealand dollar in it to be afraid of this. If you are trading EUR/USD, then you don’t care about news on the New Zealand dollar, right? But if you are trading, let’s say, NZD/CAD, then yeah, you should be afraid of this news and you should adjust accordingly.

Now, what I do when there’s monster news is I pause my limit orders. That means you withdraw the limit orders. You just discard the limit orders, and then after the news has passed, you place those limit orders back on the chart. What I use is the Trade Manager tool. That’s the one I showed you before. It has this clever feature, and I don’t think any other software on the internet has this. What it does is it automatically withdraws all your limit orders before macro news, and then after the macro news, it places those limit orders back on your chart. So you do this automatically. You don’t need to care about macro news.

Now, if you are in a trade and news is going to hit—I mean, monster news is going to hit the market—then you want to quit the trade. Quit the trade before the macro news hits. A couple of minutes is fine. Even a couple of hours is fine because this is swing trading, so we don’t need to stress about it too much.

So just quit the trade before the monster news, and it’s possible to re-enter afterwards. And that’s what I want to cover here: how to go about this, how to go about re-entering the trade.

So after a macro news event, the re-entry is possible under specific conditions. And the conditions are: you only re-enter if you can get the same price or better than your exit price.

I should probably show you on this picture here, like a little demonstration. Here is a heavy volume zone and a strong uptrend. So that means this is the Volume Accumulation Setup. Let’s imagine you’ve entered your trade in here, and let’s say that this is the macro news day. So what you want to do is you want to quit your trade before the macro news. So let’s say you quit your trade in here.

Now there is the macro news. That’s this candle. You are not trading through that. And now you would like to re-enter the trade. If the macro news doesn’t cause too much volatility and if a strong trend doesn’t start, then you can re-enter the trade.

Ideally, the macro news goes just a little up, a little down, and does nothing, and after the macro news, you are able to jump in again at the same price where you quit the trade. That would be here. That’s the ideal situation.

Well, not ideal. Ideal is when you are able to jump in for a better price. That means, for example, somewhere in here. That’s a better price because you quit in here and then you re-enter here. So you can re-enter here.

But if the price after the macro news is here, you don’t re-enter because at this point, you would be chasing the market. You would be entering the trade at a worse price than where you quit it in here.

I hope this makes sense. Essentially, you just want to re-enter at the same price or better. Don’t chase the market. If the macro news hits the market and the price starts to run, then forget about chasing it and focus on the next trade.

All right, so that’s how I do it. By the way, if the macro news hits your stop, then no re-entry, right? If your stop is here, macro news goes boom, hits your stop—no re-entering the trade.